The British have the same right to buy in Spain as the Spanish do, but the legal processes will not be like those you are experience in the UK.
It is highly advisable to invest in the services of an independent, English-speaking Spanish solicitor, who specialises in property law. They will not only oversee and organise the whole purchase process, but will often advise you on tax and inheritance issues too. This is even more important if you aren’t a fluent Spanish speaker, as they will be able to guide you through the details of the transaction, so that you fully understand the contract and supporting documentation. It is important to establish in whose names the property will be put and who will inherit it (especially for unmarried couples with children from previous relationships), among many other vital issues.
To be introduced to a recommended and trusted Anglo-Spanish law firm, email [email protected] or call our Resources Centre on 020 7898 0549.
As buyer, you will have the choice of notary (Notario). Don’t confuse a lawyer, employed by you alone to protect your interests, with a notary. While Spanish notaries are legally trained and mandatory for any property transaction in Spain, they are employed by the government and so officially do not act for either the buyer or vendor. The role of a notary is to oversee and rubber-stamp the paperwork in a property transaction, check all necessary taxes are paid and register the property with the Spanish Land Registry.
When you have found the property you wish to buy and have agreed a price, the agent will usually ask you to sign a reservation agreement to take the property off the market at the agreed price for, usually, 15-30 days. You will normally pay at least €3,000 but it could be as high as €10,000 or more, depending on the price of the property. Sometimes the deposit will be returnable if you change your mind at this early stage, but sometimes it won’t; it depends on the terms. By making the agreement subject to preliminary legal checks, mortgage loan availability on the property and a building survey, the deposit should be returned if there are problems.
Most legal documents will be in Spanish so a translation must be given and both signed by the owner and the buyer or their representatives.
Each person buying the property will need to get their número de identificación de extranjero. It is essential for opening a bank account, buying property, mortgages and getting utilities connected. It’s easy to get an NIE but it can take from one day to six weeks, so it is often the first thing you do after agreeing on a property. Your estate agent will normally help, since their commission depends on it, taking you down to the immigration or tax office and ensuring you have all the correct documentation. Your lawyer will now start the search process to ensure that the property is legally the seller’s to sell, has planning permission and no debts or restrictions on the sale. At this stage if there are legal problems not mentioned in the sale particulars you will be entitled to back out and get your deposit repaid.
Before the 15-30 days set out on the reservation agreement have run out, you will be asked to sign the deposit contract. This commits you to buying the property and the seller to sell it to you, so there is no chance of gazumping like in the UK. There are various legal ways of doing this, but for most British buyers it will be a deposit contract (contrato de arras), which is sometimes translated as the ‘earnest money contract’.
The contrato de arras sets out the exact details of the property: what it is and what the sale includes, where it is and who owns it. It sets out the price, payment method and when the purchase will be completed.
The buyer normally pays a deposit of 10% of the price at this stage. Although the parties can agree not to include these conditions, the law says that if the buyer now pulls out (breaches the agreement) they lose the deposit and if the seller is in breach, they must return the deposit DOUBLED. The deposit should be kept in a separate account controlled by the lawyers and not passed to the seller until the final agreement.
Signing the escritura completes the process. You normally sign this at the notary’s office, but you can give your lawyer Power of Attorney if you prefer. Signing the escritura pública (contract of sale) is the formal handover of the property. The buyer pays the balance and gets the keys in return.